(Adds wholesale inventories data)
* U.S. new jobless claims fall in latest week
* Four-week average for new claims at second-lowest level
* Wholesale inventories rise, signal GDP rebound
By Jason Lange
WASHINGTON, July 10 The number of Americans
filing new claims for unemployment benefits fell last week to
one of its lowest levels since before the 2007-09 recession, a
sign of increasing health in the labor market.
Other data on Thursday showed a rise in business inventories
during May, bolstering expectations the economy was bouncing
back from a weak first quarter.
Initial claims for state unemployment benefits dropped by
11,000 to a seasonally adjusted 304,000 for the week ended July
5, the Labor Department said. Economists had expected no change
in the number of first-time applications for jobless aid.
The readings had little impact on financial markets, as U.S.
stocks and government debt yields fell over concerns about
Italy's economy and the health of Portugal's top-listed bank.
Employers slashed their payrolls during America's deep
recession, but the long cycle of aggressive layoffs now appears
The four-week moving average for new claims, considered a
better measure of underlying labor market conditions as it irons
out week-to-week volatility, declined by 3,500 to 311,500 last
week. That was the second-lowest reading for the moving average
since August 2007. After falling steadily for several years, the
moving average has been largely unchanged since the spring.
The labor market is still not fully healed. Firms have been
more reticent about hiring, although companies added 288,000
jobs to their payrolls in June and the unemployment rate fell to
6.1 percent, closing in on a six-year low.
"The labor market is firming up," said Stephen Stanley, an
economist at Pierpont Securities in Stamford, Connecticut.
Stanley cautioned against reading too deeply into last
week's claims data because many factories shut down for parts of
July to retool, often making claims data during the month
The Labor Department said there were no special factors
influencing the state level data.
Separately, the Commerce Department said wholesale
inventories rose 0.5 percent in May, just below economists'
expectations for a 0.6 percent increase.
The gains were driven by increases in inventories of metals,
autos, machinery and lumber.
Inventories are a key component of gross domestic product
changes. The component that goes into the calculation of GDP -
wholesale stocks excluding autos - increased 0.3 percent in May.
A sharp slowdown in the pace of restocking by businesses
helped to sink economic growth in the first quarter, but a swing
in inventories is expected in the April-June period.
The economy contracted at a 2.9 percent annual pace in the
January-March period, with inventories playing a big role in the
decline. Many analysts forecast growth in the second quarter to
rebound to at least a 3 percent pace.
(Reporting by Jason Lange; Editing by Paul Simao)